Why Provider Leaders Need to Understand the Significance of PBGH’s Recent Foray into Care Management

Oct. 5, 2016
The Pacific Business Group on Health, one of the most progressive purchaser alliances in healthcare, has been involved in an extensive care management initiative, one that provider leaders would do well to understand and reflect on

It was interesting to view a video released at the end of last year by the San Francisco-based Pacific Business Group on Health (PBGH), one of the most progressive—and assertive—regional purchaser alliances in healthcare. PBGH has for years moved ahead to try to help health plans and providers move into the emerging new world of healthcare.

The video I viewed recently was narrated by Diane Stewart, senior director for care design for PBGH. In the video, Stewart, who described her division’s work by saying, “My team seeks better ways to care for patients, ways that improve quality and lower costs,” described a truly innovative initiative that PBGH has been sponsoring that has won praise—and significant federal funding.

Stewart begins by framing the broader landscape around the initiative. “When we take a look at the total healthcare spend in the United States,” she notes, “we see that only 5 percent of the patients account for 50 percent of that spending. And when we take a closer look at that 5 percent of patients who are using most of our healthcare dollars, we find that many of them have chronic illnesses that they’re living with every day—it could be a combination of kidney disease, heart disease, lung disease, and they’re doing their best to manage those conditions on their own, but even doing as well as they can, they find themselves in and out of the hospital and into the emergency room, they’re going back and forth to specialists appointments, and to hospitals, managing multiple medications, and some of them are able to do that on their own, and some of them are not.”

Importantly, Stewart says, “What we’ve learned is that by having them connect and have a trusting relationship with a care coordinator, who can help them better manage their multiple illnesses, who can help them manage their illnesses and help them problem-solve those challenges that those people have, that it can make a huge difference in the quality of life for these patients, as well as for their total spending in the healthcare system.”

As a result, Stewart says, “The Pacific Business Group on Health tested a model with 23 delivery systems in five states. And by matching 15,000 patients who had a history of hospitalization and emergency use, with trusting care coordinators, we found that we were able to reduce days in the hospital, reduce emergency room visits, and improve care for patients.”

Stewart provides a very illuminating example of how the care coordinator program, that of “an elderly gentleman, 85 years old.” That patient, she notes, has “lung disease, trouble breathing sometimes, but is otherwise able to live on his own. But he’s been hospitalized 24 times in the last 12 months,” she notes. “He had a good relationship with his doctor, got good medical care, but still had a lot of unplanned hospital stays. When the care coordinator first went to his home to meet him, she began to understand that he had lost his wife six months ago, was severely depressed; his oxygen tank his doctor had ordered for him, was empty; his wheelchair was broken; and because of his progression, he had no energy to either fill the oxygen tank or make an effort to get out and about and see other people.”

Continuing on with this case study example, Stewart notes, “So here’s an example where, although he has a medical condition, most of his challenges were not medical. What the care coordinator was able to do was, one, make sure the oxygen tank and the walker got fixed. But that alone wasn’t going to solve his problem. She found a senior center nearby and got him free transportation to the senior center three times a week, so he was with other people again, instead of feeling isolated. She got him connected with a food program, Meals on Wheels, which provided him with meals; he had lost ten pounds. And just by talking to him every day and then every week, and then less often, he was able to take care of himself, and find joy in his life again.”

That case study example illustrates exactly why this PBGH program has been successful, Stewart notes in her video narrative. “Let’s take a look at what are some of those care elements that work for this set of patients, and that we were able to spread across 23 delivery systems,” she says. “Number one, a care coordinator needs to establish a face-to-face relationship with the patient. Number two, it has to be connected to the patient’s doctor. It was the patient’s doctor who had sent the care coordinator to the house. And that care coordinator can be the eyes and ears for the doctor about how that patient is doing. Number three, the care coordinator had to understand the patient’s life from their view, not just the medical condition, but everything that got in the way of taking better care. And fourth, had to have the information so that she could connect him to other services in the community that would allow him an improved quality of life, as well as better healthcare. In fact, this elderly gentleman had no hospitalizations or visits to the emergency department, for six months” following the intervention.

That model, which Stewart originally credits to the Seattle-based Boeing Company, PBGH tested at CalPERS (the California Public Employees’ Retirement System) and at PGE (Pacific Gas & Electric Company). “That innovative model worked equally well, and we proposed to Medicare that we spread the model to Medicare patients as well, and won an award from CMS [the federal Centers for Medicare & Medicaid Services] to test the model for Medicare patients across 23 delivery systems in the western U.S. And now we’re just beginning to work with the state of California to adapt the same model to MediCal” (California’s Medicaid). “And we’re looking to figure out where the model is working, and where it needs to be altered, to improve patient care.”

Time to wake up and smell the new-healthcare coffee

Now, let’s look at the implications of this particular initiative, because there are a few very important ones. First and foremost, look who’s driving the train: a business coalition/purchaser alliance. That fact is no accident. Might that fact surprise some on the provider side of healthcare? Perhaps. But really, it shouldn’t. The reality is that the employer-purchasers of healthcare in the U.S. have become increasingly exasperated in the past three decades, as healthcare costs have exploded, even as outcomes have not significantly improved. In other words, the purchasers’ value for services purchased has simply not been demonstrated by providers, who, from the purchasers’ viewpoint, simply want to keep things running as they have been.

But the status quo is no longer acceptable to employer-purchasers. And while most people’s first thoughts around employer-purchasers in healthcare are around the increasing introduction of high-deductible health plans for their employees, the reality is that employers are becoming more and more directly involved in closely overseeing care and care management in healthcare these days, whether providers like it or not. Not surprisingly, some large corporations are even going back to an older concept, that of industrial medicine.

Second, it’s important to note that the nation’s most progressive purchaser alliances, including the Pacific Business Group on Health, aren’t simply coming into all this with sledgehammers; instead, they are working thoughtfully and carefully to sponsor and cultivate the most innovative care management and population health initiatives, and those with the best chance of success. And they’re doing it using sophisticated techniques, and working with good data.

And third, all of this should clearly indicate to the leaders of patient care organizations and to clinician leaders yet another sign of how quickly things are changing in the currently evolving landscape in U.S. healthcare.

What’s more, as the purchasers and payers learn more and more about the mechanics of healthcare delivery and care management, providers had better step up their game, because as purchaser alliances like PBGH learn more about the detailed mechanics of care delivery, it will become increasingly impossible for provider leaders to stonewall and obfuscate around the imperatives facing them in terms of improving patient outcomes, care quality, delivery efficiency, and cost-effectiveness. It’s a bit like restaurant patrons storming the kitchen and making the stew themselves. Once that’s happened, the mystery of the culinary art is gone.

So what the folks at the Pacific Business Group on Health are doing is significant, and should be noted. Above all, provider leaders should be clear that the era in which they could hide behind clouds of opacity around care delivery is definitively gone now—forever—and need to adjust their perceptions, and expectations, accordingly.

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